Grantham’s GMO assumes crash position

Via the AFR:

[6%] is the amount by which analysts expect Wall Street’s earnings per share to fall in the fourth quarter of 2020 from a year earlier.

…“I don’t know whether investors believe the forecasts they are looking at. I don’t know how long it’s going to take it for the market to wake up to reality. And I don’t know exactly what reality is going to look like.”

…For its un-correlated funds (which don’t use a benchmark to measure relative returns) Inker has reduced the net equity exposure to 25 per cent from 55 per cent. Grantham is completely behind the decisions.

…“We’d rather take the risk of looking stupid than … be in a position where we lost the clients 30 per cent or 40 per cent because the equity market took another leg down.”

Amen to that.

David Llewellyn-Smith
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